In a further bid to concretize the ‘Year of Gas’ mantra of the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) has signed a $1.16 million Grant Agreement with the United States Trade Development Agency (USTDA) for the NNPC-Abuja Independent Power Project.
The project is designed to generate 1,350 megawatts (MW) of electricity to improve power generation and distribution around the country.
The USTDA grant will complement the ongoing FEED project in order to make the Abuja IPP project bankable for strategic investors’ participation.
The Grant Agreement was signed by the Managing Director, NNPC Gas & Power Investment Company (NGPIC), Hussain El-Yakub and USTDA’s Director, Thomas Hardy. The NNPC will work with US firms GE and Continuum Associates to deliver the Project.
Group Managing Director of the NNPC, Mallam Mele Kyari who witnessed the signing at the ongoing Nigeria International Petroleum Summit (NIPS) in Abuja on Tuesday, said the project was an important one for the Corporation because it will boost Nigeria’s gas-to-power aspirations and is a positive step towards utilizing its abundant gas resources.
Delivering a keynote address on “Oil & Gas: Future Scenarios and Implications for Security, Environment and Economic Growth”, Kyari said the plan to build the power plant in Abuja was part of a national strategy would help diversify and monetise NNPC’s gas revenue stream through power generation.
“The signing of this grant is symbolic in the sense that it is a confirmation of the increased transparency & stability which has placed the Corporation in pole position to serve the needs & aspirations of 200 million Nigerian shareholders,” he said.
Kyari reiterated the NNPC’s capacity to achieve the mandate of guaranteeing Nigeria’s national energy security so as to promote growth and create value across all tiers of the economy.
Contributing to discourse on ‘Charting the Way Forward for Gas and Energy’, Chief Operating Officer, Gas & Power, NNPC, Yusuf Usman said Nigeria faces huge challenges in its power sector.
“In his NextLevel agenda, President Buhari promised Nigerians 10,000 mega watts of additional power and under my mandate as COO I am expected to deliver 5,000MW of new power.”
“Therefore, there is no going back on the Ajaokuta-Kaduna-Kano pipeline and we must find offtakers for it along the route. We are going to put 1,350MW in Abuja and with the support of USTDA we can achieve bankability,” Usman noted.
He added that the NNPC was also going to deliver gas for 1,000MW and 1,350MW power plants in Kaduna and Kano respectively.
However, Usman cautioned that these projections could only be achieved with a Power Purchase Agreement (PPA), which unfortunately has been suspended at the moment due to mounting debts.
“While the Nigerian Bulk Electricity Trading Plc (NBET) has said they will only do a take-and-pay, we will work towards developing a PPA that is forward looking and ensures that gas supplied is paid for. Once this is achieved we will work in unison with other sectors to deliver on power,” the COO Gas assured.
He asserted Nigerias right to industrial development and in view of ongoing narratives on energy mix and climate change, advocated for gas as a sustainable resource to drive the initiative.
Other stakeholders noted that the project would also assist in reducing the current gas flare in the country adding that it would help to decongest the over-voltage on the transmission network coming from closely located power generating companies in the gas-producing areas.
The project would sit on 54.7 hectares of land in Dukpa, Gwagwalada Area Council of the Federal Capital Territory (FCT) and NNPC has already begun Environmental Impact Assessment (EIA) in the area.